1. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning Chapter 33 Consumer Protection Twomey Jennings Anderson’s Business Law and the Legal Environment, Comprehensive 20e Anderson’s Business Law and the Legal Environment, Standard 20e Business Law: Principles for Today’s Commercial Environment 2e

2. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 2 General Principles Consumer protection statutes originally were meant to protect persons of limited means and knowledge. Now, a consumer may be defined as any person or entity that uses goods or services. Some consumer protection statutes have been expanded to protect all consumers.

3. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 3 General Law Contract Tort Administrative Advertising Seals of Approval Labeling Selling Methods The Consumer Contract Credit Cards Payments Defense Preservation Product Safety Credit, Collection, and Billing Methods Credit Standing and Reputation Protection Real Estate Sales Service Contracts Franchises The Defendant The Consumer Overview

4. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 4 Areas of Consumer Protection Fraudulent or Deception Advertising. –Regulated by FTC. –Corrective advertising may be required. Labeling.

5. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 5 Areas of Consumer Protection Selling Methods. –Home-Solicited Sales. –Referral Sales. –Telemarketing Fraud. 2005 National Do Not Call registry.

6. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 6 Areas of Consumer Protection The Consumer Contract. –Form of Contract (cannot be unconscionable). –Two-sided contract. –Contract terms (acceleration clauses). –Limitations on Credit (open-end mortgages) –Unconscionability.

7. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 7 Credit Cards Credit card protections include: –prohibition of the unauthorized distribution of credit cards, –prohibition of surcharge for use of credit cards, –limited liability of the cardholder for the unauthorized use of a credit card.

8. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 8 Credit, Collection & Billing Methods

9. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 9 Protection of Credit Standing and Reputation Fair Credit Reporting Act. –Applies to only consumer credit. –Privacy (Investigative Consumer Report). –Protection from False Information.

10. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 10 Other Consumer Protections In some cases of real estate development sales, stricter standards of disclosure apply. Some service contracts are treated like a consumer sale of goods.

11. Copyright © 2008 by West Legal Studies in Business A Division of Thomson Learning 11 Other Consumer Protections Franchisors must give prospective franchisees a disclosure statement before contracting. Lemon laws provide special protection to buyers of automobiles for personal, household, or family use.